Breaking News: Refusing to Allow an Employee to Rescind His Or Her Voluntary Resignation Can Get You Sued

Here is the scenario. Your employee decides to voluntarily resign. She gives plenty of notice. Before her scheduled end date, the employee provides information relevant to a sexual harassment investigation involving her supervisor. Before the scheduled end date, the employee tries to rescind her employment. The supervisor refuses. Here’s the question: Is the refusal to allow the employee the opportunity to rescind her resignation an “adverse employment action” for purposes of a retaliation claim?

It could be, at least according to the Fifth Circuit Court of Appeals. A similar scenario played out in Porter v. Houma Terreboone Housing Authority. According to the court:

“Just as an at-will employer does not have to hire a given employee, an employer does not have to accept a given employee’s rescission. Failing to do so in either case because the employee has engaged in a protected activity is nonetheless an adverse employment action.”

This is something employers need to be aware of. Remember: thoroughly investigate all work place harassment claims. Also, separate the subject of the investigation from any decisional process regarding the employee’s employment. In a perfect world, the decision-maker would not have any knowledge regarding the employee’s “protected activity.”

Article By Peter T. Tschanz of Barnes & Thornburg LLP

© 2015 BARNES & THORNBURG LLP

Health Officials’ Latest Tool in Tool Box – Whole Genome Sequencing

In late October, the Food and Drug Administration (FDA), Centers for Disease Control and Prevention (CDC), along with state and local officials investigated an outbreak of E. coli infections linked to food served at a major fast-casual restaurant chain. Much of the underlying information documenting the outbreak has been derived from an advanced laboratory technique called “whole genome sequencing” (WGS). This is a fairly new instrument in the CDC toolbox. WGS reveals the complete DNA make-up of an organism, thereby enabling health officials to better understand variations both within and between potentially pathogenic species. Such information can then be compared with clinical isolates from sick patients, and, if they match, there may be a reliable link established between the illness and the pathogen. This new technique has the potential to define the scope of a foodborne illness outbreak more quickly and ideally will help to prevent additional cases. Traditionally, this analysis has been done via a process known as pulse-field gel electrophoresis (PFGE). But PFGE has a shortcoming in that it is unable to differentiate between related species of organisms, which can be critical when health officials are trying to delineate the specific source of the outbreak, and want to know whether to recall a product or not.

The FDA cites numerous examples of how it has used WGS: 1

  • To differentiate sources of contamination, even within the same outbreak;

  • To determine which ingredient in a multi-ingredient food harbored the pathogen associated with an illness outbreak;

  • To narrow the search for the source of a contaminated ingredient;

  • As a clue to the possible source of illnesses; and

  • To determine unexpected vectors for food contamination.

The use of techniques such as WGS reflects FDA’s shift toward a broader preventative-centric approach to food safety. This approach can be associated the Food Safety Modernization Act (FSMA), signed into law on January 4, 2011, which requires comprehensive, science-based preventive controls across the food supply.2 FSMA provides the FDA with new enforcement authorities designed to achieve higher rates of compliance with prevention-based and risk-based food safety standards, and to better respond to and contain problems when they do occur. Lastly, the law also gives the FDA important new tools to hold imported foods to the same standards as domestic foods and directs FDA to build an integrated national food safety system in partnership with state and local authorities.

WGS also has been employed in the context of recent illness outbreaks associated with products regulated by the Food Safety and Inspection Service (FSIS), which oversees the safety of meat and poultry. In some circumstances involving FSIS, the regulated industry has found itself on the receiving end of confusing scientific input, as regulatory recommendations based upon PFGE analysis were subsequently negated by WGS data.

A shift to WGS may allow health officials to more quickly and more precisely connect the dots during an outbreak, and use of this tool may also benefit the regulated community. The enhanced precision of WGS may provide the regulated community with a new ability to prevent being falsely labeled as the source of the outbreak. Under the prior testing regime, PFGE tests were often unable to differentiate between related species of organisms, and as a result, regulators were at times forced to cast an overly wide net to capture the source of an outbreak. The new WGS technique provides authorities with a more precise and accurate tool. But, as circumstances with FSIS suggest, companies may also encounter confusion over growing pains associated with the movement from one generation of technology to another. We will continue to monitor the development and use of new tools and techniques the FDA, FSIS, and other federal agencies are using to prevent and respond to food safety issues.

ARTICLE BY Robert G. Hibbert of Morgan, Lewis & Bockius LLP

1 Food and Drug Administration, Examples of How FDA Has Used Whole Genome Sequencing of Foodborne Pathogens For Regulatory Purposes, (last visited Nov. 9, 2015).
2 FDA Food Safety and Modernization Act, Pub. L. No. 111-353, 124 Stat. 3885 (2001). 

Employers: Twitter is Going Crazy Over #InternationalMensDay Hashtag

This will be a short post. Earlier this week we posted an article that discussed the need for employers to stay on top of what is trending on the Internet. Why? Because trending topics can sometimes lead to controversial discussions that might not be consistent with an employer’s EEO Policy. As a result, we explained that it would be prudent to understand what may be the current topic being discussed around the watercooler. Here is a follow up to that article:  The #InternationalMensDay hashtag is currently trending on Twitter (right now at 114K tweets). What is the relevance of this topic to employers? A quick search shows that a lot of the content posted can be construed as inappropriate and/or discriminatory (although presumably meant to be humorous).  It’s the middle of the work day where we are – so we can only presume a lot of this content is being posted by employees in the workplace.

Remember: Title VII and many state laws prohibit discrimination based on gender. The more questionable content generated in the workplace, the better chance an employee can argue there is evidence of a  convincing mosaic of discrimination tolerated by the employer. Be sure to remind employees of your company’s EEO policy if you come across any inappropriate content and/or discussions. And, as always, be sure to stay on top of trends that may have an impact in the workplace.

ARTICLE BY  Peter T. Tschanz of Barnes & Thornburg LLP
© 2015 BARNES & THORNBURG LLP

Best Practices for Creating Landing Pages That Convert

Landing pages — dedicated web pages that a visitor to your website, blog, social media post or e-newsletter is guided to after clicking on a link — are critical when it comes to converting those visitors into qualified leads.

landing pages internetIf you have been directing traffic to the home page of your website, you are missing a big opportunity to capture more leads. Landing pages have been proven to more than double conversion rates when compared with website home pages. This is because they are created specifically for converting leads, featuring specialized content and offers that appeal to a targeted audience.

To make your landing pages pay, you need to know the basics about how to create a highly effective landing page.  Here are 10 steps you need to take in developing landing pages for your law firm:

  1. Have a singular goal.  You want your landing page to do just one job for you — get the visitor to download that free report, sign up for a seminar, subscribe to your newsletter, etc.  Don’t clutter them up with multiple offers.  One page.  One job.

  2. Use a single, relevant visual.  Choose an illustration or photo that is relevant to your offer.

  3. No false endorsements.  Don’t create false endorsements for your offer.  Avoid cheesy endorsement copy that turns visitors off.

  4. Use simple design.  Keep your design simple with minimal, impactful copy that consists of a headline, subhead and bullet points that make the content easy to scan.

  5. Quick load.  Be sure your landing page loads quickly; you only have a few seconds for it to pop up or your visitor will lose interest and click off.

  6. Compelling copy.  The worse thing you can do is bore your visitor.  Your copy needs to be readable, believable and lead the visitor quickly to your ultimate goal.

  7. Eyes on the prize.  Write and design your land page with your singular goal in mind.  Do not clutter the content with irrelevant prose.

  8. Inform and educate.  Don’t waste the visitor’s time by not delivering anything of benefit.  And don’t ask for too much information — a name and an email address should be sufficient.

  9. Be truthful.  If you have actual testimonials that would be appropriate, use them but be sure you are not making any false promises or guarantees.

  10. Provide value.  Make it clear what the value and benefits of redeeming your offer will provide to your visitor.  If they are entrusting you with their information, you need to let them know it is a fair exchange for what you are providing with the offer.

Article By Stephen Fairley of The Rainmaker Institute

© The Rainmaker Institute, All Rights Reserved

P3 Legislation in Florida – Public Private Partnerships

On September 24-25, Miami-Dade County held a P3 Institute entitled “The P3 Pipeline: A Forum for the Private Sector.” Among the topics discussed at the Institute was a measure currently before the Florida Legislature that, if enacted, will make the P3 procurement process easier for all parties involved.

Two bills, House Bill 97 and House Bill 95, have advanced to House committees and are moving through the legislative process. HB 97, known as “Public Records and Public Meetings,” is currently in the State Affairs Committee. HB 95, a companion bill known simply as “Public-Private Partnerships,” is in the Appropriations Committee. Approval by all required legislative committees is a necessary step before these bills can be introduced in the 2016 legislative session.

If it passes, HB 97 would exempt unsolicited P3 proposals by responsible public entities from public records and public meeting requirements for a specified time period. HB 95, a corollary bill, revises provisions regarding responsible public entities and unsolicited proposals for qualified projects. In doing so, HB 95 expands the list of entities authorized to conduct P3s to include state universities, special districts, school districts (rather than school boards), and institutions included in the state college system.

On a related note, the bills’ sponsor, Representative Greg Staube (R-Sarasota), has stated that several state legislators (without naming the legislators specifically) are discussing the possibility of a centralized state office that could offer Public Private Partnership procurement expertise to Florida counties. The office could be housed in an existing state agency, like the Department of Management Services or Enterprise Florida, to save money.

Article By Albert E. Dotson, Jr. & Leah Aaronson of Bilzin Sumberg Baena Price & Axelrod LLP

© 2015 Bilzin Sumberg Baena Price & Axelrod LLP

Supreme Court to Decide Whether Government can Freeze a Defendant’s Lawful Assets Pre-Conviction

Whether the government can freeze all of a defendant’s assets before trial, even where those assets are not tainted by any connection to alleged federal offenses, thereby preventing a defendant from paying for his own defense, will be decided by the U.S. Supreme Court in Luis v. United States, No. 14-419.

The federal Mandatory Victims Restitution Act of 1996 (“MVRA”) requires that defendants convicted of crimes committed by “fraud or deceit” compensate victims for the full amount of the victims’ losses. Often, however, by the time there is a conviction, criminal defendants do not have any assets to satisfy those judgments. Seeking to address this problem, the United States has invoked the Fraud Injunction Act to freeze legitimate assets pre-conviction to pay a later judgment.

The Fraud Injunction Act statute authorizes a “restraining order” against assets when a person is “alienating or disposing of property, or intends to alienate or dispose of property” that is “obtained from” or “traceable to” certain federal offenses. In such cases, the statute permits a court to prohibit the use of tainted property “or property of equivalent value” before trial to ensure that sufficient assets are available to satisfy any judgment.

In 2012, the federal government charged Sila Luis with conspiracy to commit Medicare fraud – a scheme allegedly amounting to over $45 million, stemming from claims for home health services that were neither medically necessary nor actually performed. Using the Fraud Injunction Act, the federal government asked the district court to freeze all of Luis’s assets, including those that were not even allegedly obtained through fraud, totaling approximately $15 million. The district court agreed to impose the freeze. .

Luis then requested that the district court release her untainted assets so she may retain her lawyer. The district court denied the request, explaining that, because the government could locate “only a fraction of the assets” Medicare had paid Luis’s companies, her “untainted” assets also could be frozen. The district court likened Luis’s situation to that of a bank robber indicted for stealing $100,000; That is, if the robber has already spent the allegedly stolen money which he could not use to hire his preferred lawyer in any case, he also should not be able to spend a different $100,000 he “just happens” to have to hire the lawyer he wants.

Luis appealed the district court’s decision, arguing she was being deprived of her Fifth Amendment right to due process of law and her Sixth Amendment right to counsel of her choosing. The Court of Appeals for the Eleventh Circuit, in Atlanta, upheld the district court’s denial of her request to release her legitimate assets, stating that Luis’s arguments were foreclosed by the U.S. Supreme Court’s decision in Kaley v. United States (2014) and other decisions.

In Kaley, the Supreme Court held that when the government, following a grand jury indictment, restrains tainted assets needed to retain a lawyer, the Fifth and Sixth Amendments do not require a pretrial hearing at which the defendant can challenge a grand jury’s finding of probable cause.

Luis asked the Supreme Court to review the case. The Court agreed to do so and recently heard argument. A decision is expected by next June.

Article By Ramsay C. McCullough of Jackson Lewis P.C.

Jackson Lewis P.C. © 2015

Substantial OSHA Penalty Increases Are Coming

Line GraphOSHA penalties are going up.  EPA’s penalties are going up, too.  However, while EPA penalties have been going up modestly every four years to take inflation into account, OSHA penalties have not increased in 25 years.  Maximum OSHA penalties may jump as much as about 78 percent next year.  For a provision quietly tucked away in budget legislation, this packs quite a punch.

The Legislative Change

On November 2, 2015, President Obama signed into law the Bipartisan Budget Act of 2015.[1]  Section 701 of that legislation is the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Adjustment Act).  The 2015 Adjustment Act amends the Federal Civil Penalties Inflation Adjustment Act of 1990[2] to remove the OSHA exemption to the requirement that civil monetary penalties be periodically increased to account for inflation.  The amendment also changed the frequency of the inflation increases from “once every 4 years”[3] to “every year.”

In addition, the new law entitles OSHA to a single “catch up” penalty increase to account for the lack of periodic penalty increases, which “shall take effect no later than August 1, 2016.”  OSHA is authorized to calculate this initial increase based on the percentage difference between the Consumer Price Index (CPI) in October 2015 and the CPI in October of the calendar year that the civil penalty was last adjusted under any different law.[4]  In this instance, because OSHA penalties have not been adjusted since 1990, the catch-up penalty increase will be based on the October 1990 CPI as compared to the October 2015 CPI.

Based on the October 2015 CPI, the percentage difference is expected to be about 78 percent.[5]  In the catch-up adjustment, $7,000 OSHA penalties could increase to as much as approximately $12,471, and $70,000 OSHA penalties could increase to as much as approximately $124,710.  If OSHA rounds those numbers, the likely maximums would be $120,000 and $12,000.

Past Efforts to Raise Maximum OSHA Penalties

Under section 17 of the Occupational Safety and Health Act of 1970 (OSH Act), OSHA penalties for “willful” or “repeat” violations have a maximum civil penalty of $70,000 but not less than $5,000 for each willful violation.[6]  Penalties for “serious” violations have a maximum of $7,000 per violation.  Those figures have remained static since 1990 despite repeated efforts to increase them.

For example, in 2009, a Senate bill and a House bill,[7] both entitled the Protecting America’s Workers Act, would have amended section 17 of the OSH Act with one-time maximum civil penalty increases.  The $70,000 “willful” violation maximum would have been increased to $120,000 but not less than $8,000 (up from $5,000).  The penalties for “serious” violations would have increased from a maximum of $7,000 to a maximum of $12,000, and penalties for “serious” violations that result in employee fatalities would have been increased to a maximum of $50,000 but not less than $20,000 for employers with more than 25 employees.  The proposed legislation did not pass either House of Congress.[8]  This year, updated versions of the Protecting America’s Workers Act were introduced which would make the same adjustments in penalties.[9]

After more than 25 years and extensive legislative effort, OSHA penalties are poised for a significant initial increase, due to a provision added to an appropriations bill without hearings or debate.

Implications for State OSHAs

About half the states have their own enforcement programs under OSHA-approved state plans, even though they generally enforce OSHA’s standards.  Thus, the statutory increase in federal OSHA’s maximum penalties will not directly impact state OSHA programs, whose maximum penalties are set by state law.  However, this federal increase is expected to lead to state increases as well.  Under section 18 of the OSH Act, state plans must be “at least as effective” as those of federal OSHA.[10]  Lower state maximum penalties are not likely to be seen as being “as effective” as federal maximums.

EPA Penalties Are Going Up Too

Under the Federal Civil Penalties Inflation Adjustment Act of 1990, EPA penalties have increased every four years.  Between 1996 and 2013, four adjustments of EPA’s statutory civil payment amounts were implemented.[11]  Annual inflation adjustments will now be required.  In recent years inflation has been low, so the next increase will likely be relatively modest.

Article By Mark N. Duvall & Maryam F. Mujahid of Beveridge & Diamond PC
© 2015 Beveridge & Diamond PC

[1] Bipartisan Budget Act of 2015, Pub. L. 114-74.

[2] Id at § 701.  Prior to the amendment, Section 4(1) read: “by regulation adjust each civil monetary penalty provided by law within the jurisdiction of the Federal agency, except for any penalty (including any addition to tax and additional amount) under the Internal Revenue Code of 1986, the Tariff Act of 1930, the Occupational Safety and Health Act of 1970, or the Social Security Act, by the inflation adjustment described under section 5 of this Act[.]”  H.R. 3019, 104th Cong. (1996).

[3] H.R. 3019, 104th Cong. (1996) (“The head of each agency shall, not later than 180 days after the date of enactment of the Debt Collection Improvement Act of 1996 [Apr. 26, 1996], and at least once every 4 years thereafter[.]”) (emphasis added).

[4] This initial catch-up adjustment may not exceed 150 percent of the amount of the civil monetary penalties as of the date that the 2015 Adjustment Act was enacted.

[5] The October 1990 CPI is 133.5 and the October 2015 CPI is 237.838.  For more information on CPI figures and calculations, click here.

[6] 29 U.S.C. § 666.

[7] S. 1580, 111th Cong. (2009); H.R. 2067, 111th Cong. (2009).

[8] In addition, civil penalties for OSHA were subsequently included in proposed mine safety legislation, which was similarly unsuccessful. See H.R. 5663; Beveridge & Diamond, P.C., OSHA Legislation Gets Boost from Mine Safety Bill (Aug. 17, 2010). 

[9] S. 1112, 114th Cong. (2014); H.R. 2090, 114th Cong. (2014).

[10]  29 U.S.C. § 666.

[11] As described in the most recent (2013) EPA notice raising maximum penalties,  “EPA’s initial adjustment to each statutory civil penalty amount was published in the Federal Register on December 31, 1996 (61 FR 69360), and became effective on January 30, 1997 (‘the 1996 Rule’). EPA’s second adjustment to civil penalty amounts was published in the Federal Register on February 13, 2004 (69 FR 7121), and became effective on March 15, 2004 (‘the 2004 Rule’). EPA’s third adjustment to civil penalty amounts was published in the Federal Register on December 11, 2008 (73 FR 75340), as corrected in the Federal Register on January 7, 2009 (74 FR 626), and became effective on January 12, 2009 (‘the 2008 Rule’)”; and the fourth adjustment was published in the Federal Register on November 6, 2013.  78 Fed. Reg. 66643 (Nov. 6, 2013)

Trending Now: How Latest News Going Viral Can Lead to Employment Litigation

A downed Russian airliner, the tragic Paris attacks, the European refugee crisis, states closing their borders to Syrian nationals, Charlie  Sheen’s HIV diagnosis. What do these all have in common? They are hot topics for discussion around the watercooler.  And they also will bring out a multitude of opinions.  What’s the problem?  Opinions can be controversial and, to some, down right offensive.  Healthy debate about how the United States should handle the war on terror could be construed as evidence of religious discrimination (in some cases).  Discussion regarding Charlie Sheen’s HIV diagnosis can also quickly spiral out of control and later be construed as evidence of disability discrimination.  It’s a problem and employers need to be aware of it.

So how can you protect yourself?  Well, you certainly cannot stifle discussion about what is happening outside of the workplace.  Nevertheless, employers are encouraged to step up, stay on top of what’s trending and put a stop to any discussion that could reasonably be construed as inconsistent with the Company’s EEO policies.  You won’t be popular.  But let’s face it:  running a business is not about winning a popularity contest.

Want to stay on top of what’s trending?  Create a Twitter account and keep apprised of the most popular hashtags.  The amount of work is minimal and you’ll be tuned in to what topics are floating around the workplace.

Article By Peter T. Tschanz of Barnes & Thornburg LLP

© 2015 BARNES & THORNBURG LLP

Wyoming Senator Barrasso Introduces Carcieri Compromise Bill

More than six years after the U.S. Supreme Court’s decision in Carcieri v. Salazar, Sen. John Barrasso (R-Wyoming), the chairman of the Senate Committee on Indian Affairs, has introduced the “Interior Improvement Act” to fix the loophole created by the decision that denied some tribes rights under the Indian Reorganization Act of 1934 (IRA). The bill is not, however, the “clean” Carcieri fix that Indian Country had been seeking.

In 2009, the Carcieri court ruled that the IRA, which delegated authority to the Secretary of the Interior to place land in trust status for Indian tribes, applied only to tribes “under Federal jurisdiction” on the date of the IRA’s enactment. Under the IRA, land is to be placed into trust status only for “the purpose of providing land for Indians.” The act defined “Indian” to mean “all persons of Indian descent who are members of any recognized Indian tribe now under Federal jurisdiction.” The court held that any tribe not “under Federal jurisdiction” as of that date is ineligible to place land in trust.

Carcieri compelled the Secretary to conduct a deep inquiry into whether applicant tribes were “under Federal jurisdiction” in 1934 in anticipation of legal challenges to politically sensitive trust acquisitions, particularly those made for gaming purposes. But proving the requisite relationship between the federal government and the tribes is very difficult, as many tribes lack documentation of that relationship – largely due to the anti-tribal “allotment” policies that preceded the IRA’s enactment in 1934 and the termination policies that followed it in the 1950s.

After the Carcieri decision, tribes immediately pushed for a “clean” legislative fix from Congress – a bare amendment clarifying Interior’s authority to place in trust for all recognized tribes without limitation and retroactively affirming previous trust decisions. Opponents of off-reservation gaming, however, saw an opportunity to increase the input of local governments in trust acquisitions and even to seek a veto over federal trust acquisitions. Opposition from Indian tribes to a local veto has precluded a legislative fix repairing the damage done by the decision.

Barrasso’s bill affirms the Department’s past and present ability to accept land in trust for all federally recognized Indian tribes but, if passed, would not give local governments the veto power they sought. Instead, it would impose a new process on the Secretary in considering trust applications that increases the input sought from, and consideration given to, local governments affected by trust acquisitions.

First, the bill would require the Secretary to notify contiguous jurisdictions within 30 days of receiving an application to place land in trust and to make the tribal application publicly available on the Department of the Interior website. Those jurisdictions would have 30 days to provide comments. The Department’s current regulations already require notice and comment from the governments exercising jurisdiction over the trust acquisition, so this is a minor change.

Of much greater impact is the bill’s requirement that the Secretary give preferential treatment to those trust applications in which the tribe has entered into a “cooperative agreement” with local governments, defined in the bill as “contiguous jurisdictions.” Those applications would be expedited with a 30-day timeline for a decision approving or denying the application, or 60 days after the completion of NEPA review. This would be a drastic improvement over the current wait time, which can extend to months or even years. Relieving the Department of the requirement to conduct a Carcieri review would save considerable manpower. Those applications without cooperative agreements would still be eligible for approval but would not be expedited.

Many tribal applicants already enter intergovernmental agreements with local governments to mitigate the impacts of tribal development on trust land and pay for county-provided services that would ordinarily be paid for through property taxes, and it is now common for tribal-state Class III gaming compacts to include a requirement that tribes enter such agreements. Under Barrasso’s bill, provisions in cooperative agreements are undefined – the agreements “may include terms relating to mitigation, changes in land use, dispute resolution, fees, and other terms determined by the parties to be appropriate.” Some local jurisdictions likely will read those terms in the broadest sense possible and require the payment of “fees” as consideration for execution of a cooperative agreement.

If the tribe determined the demands of local governments to be too onerous, it would be free to submit an application without a cooperative agreement. In such cases, the Secretary, in approving an application, would be required to independently conduct a “determination of mitigation” that would consider anticipated economic impacts on contiguous jurisdictions, mitigation, and whether the local jurisdictions worked in good faith to reach a cooperative agreement.

The proposed legislation expressly provides for judicial review of final trust decisions. That judicial review is a certainty, because, while the bill does not expressly limit the Secretary’s discretion to place land in trust, it introduces numerous and ambiguous new factors that the Secretary would be required to consider in processing trust applications. Ambiguity invites litigation, and the bill would likely trade Carcieri-based legal challenges to trust acceptances for lawsuits alleging the Secretary’s failure to adequately consider these new factors.

Article By Patrick Sullivan of Dickinson Wright PLLC
© Copyright 2015 Dickinson Wright PLLC

Five Telemedicine Trends Transforming Health Care in 2016

Telemedicine is a key component in the health care industry shift to value-based care as a way to generate additional revenue, cut costs and enhance patient satisfaction. One of the biggest changes to health care in the last decade, telemedicine is experiencing rapid growth and deployment across a variety of applications.

The quick market adoption of telemedicine is fueled by powerful economic, social, and political forces — most notably, the growing consumer demand for more affordable and accessible care. These forces are pushing health care providers to grow and adapt their business models to the new health care marketplace.

Simultaneously changing is the misconception that telemedicine creates a financial strain or relies on grant funding. Smart health system leadership are creating sustainable telemedicine arrangements that generate revenue, not just cost savings, while improving patient care and satisfaction. Research conducted by the American Telemedicine Association reveals that telemedicine saves money for patients, providers, and payers compared to traditional health care practices, particularly by helping reduce the frequency and duration of hospital visits.

It is expected that the global telemedicine market will expand at a compound annual growth rate of 14.3 percent through 2020, eventually reaching $36.2 billion, as compared to $14.3 billion in 2014. And while the growing demand for convenience, innovation, and a personalized health care experience may be the greatest factor, other forces are at work as well.

These five trends will drive telemedicine’s continued growth and transformation of health care delivery in 2016:

1. Expanding Reimbursement and Payment Opportunities

Both private and government payers will continue to expand telemedicine coverage as consumers gain experience with the technology and increasingly demand access to telemedicine-based services. Some health plans have already begun bolstering their coverage of telemedicine, which they view as a form of value-based care that can improve the patient experience and offer substantial cost savings. On the government side, 2016 will particularly see more coverage among Medicaid managed care organizations and Medicare Advantage plans.

While reimbursement was the primary obstacle to telemedicine implementation, new laws requiring coverage of telemedicine-based services have been implemented at the state level, and 2016 will be the year these laws drive implementation in those states. Similarly, providers are becoming increasingly receptive to exploring payment models beyond fee-for-service reimbursement, and 2016 will continue the growth of these arrangements. Examples include institution-to-institution contracts and greater willingness by patients to pay out-of-pocket for these convenient, valuable services.

2. Uptick in International Arrangements

In 2016, more U.S. hospitals and health care providers will forge ties with overseas medical institutions, spreading U.S. health care expertise abroad. These cross-border partnerships will provide access to more patients, create additional revenue and help bolster international brands. According to the American Telemedicine Association, more than 200 academic medical centers in the U.S. already offer video-based consulting in other parts of the world. While many of these are pilot programs, 2016 will see a maturation and commercialization of much of these international arrangements, as they are a win-win for participants in both countries.

The growing purchasing power of middle-class populations in countries like China is giving more patients the means and opportunity to pursue treatment from Western medical centers. We have seen both for-profit and non-profit models for international telemedicine — hospitals partnering with organizations in the developing world to expand health care availability or offering commercial care to customers in nations with areas of concentrated wealth but lacking the capabilities and access of Western health care.

3. Continued Momentum at the State Level

State governments across the U.S. are leading the way in telemedicine expansion. According to a study by the Center for Connected Health Policy, during the 2015 legislative session, more than 200 pieces of telemedicine-related legislation were introduced in 42 states. Currently, 29 states and the District of Columbia have enacted laws requiring that health plans cover telemedicine services. In 2016, we will see more bills supporting health insurance coverage for telemedicine-based services introduced in various state legislatures.

While state lawmakers are leading the way in incorporating telemedicine into the health care system, two recent developments point to a burgeoning interest at the federal level. The Centers for Medicare and Medicaid Services (CMS) is considering expansion of Medicare coverage for telemedicine, and a bill working its way through the U.S. House of Representatives would pay physicians for delivering telemedicine services to Medicare beneficiaries in any location.

4. Retail Clinics and Employer Onsite Health Centers on the Rise

A recent Towers Watson study found that more than 35 percent of employers with onsite health facilities offer telemedicine services, and another 12 percent plan to add these services in the next two years. Other studies suggest that nearly 70 percent of employers will offer telemedicine services as an employee benefit by 2017. The growth of nation-spanning telemedicine companies such as MDLIVE and the now publicly-traded Teladoc, which offer health services tailored to the specific needs of employers and other groups, is a reflection of the demand for these services.

Additionally, consumers are increasingly willing to visit retail medical clinics and pay out-of-pocket for the convenience and multiple benefits of telemedicine services when telemedicine is not covered by their insurance plans. Both CVS Health and Walgreens have publicly announced plans to incorporate telemedicine-based service components in their brick and mortar locations.

5. More ACOs Using Technology to Improve Care and Cut Costs

2016 will be the year of telemedicine and ACOs. Since the advent of Medicare Accountable Care Organizations (ACOs), the number of Medicare beneficiaries served has consistently grown from year to year, and early indications suggest the number of beneficiaries served by ACOs is likely to continue to increase in 2016. These organizations present an ideal avenue for the growth of telemedicine.

While CMS offers heavy cost-reduction incentives in the form of shared-saving payments, only 27 percent of ACOs achieved enough savings to qualify for those incentives last year. Meanwhile, only 20 percent of ACOs use telemedicine services, according to a recent study. We believe the widespread need to hit the incentive payment metrics, coupled with the low adoption rate will lead to significantly greater telemedicine use among ACOs in 2016.

Article By Nathaniel M. Lacktman of Foley & Lardner LLP
© 2015 Foley & Lardner LLP